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First Business

News/Business. Insight on the economy and stock market. (CC)

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FOX

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00:30:00

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mpeg2video

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ac3

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U.s. 8, Toyota 5, Us 4, America 3, Chicago 3, Florida 3, Michael Woodward 2, Honda 2, Hyundai 2, Angie 2, Laura Powell 2, Louisiana 2, Koehler 2, Tony Haddad 2, Detroit 2, Illinois 1, Alan Mulally 1, Paul Eggers 1, Colletti 1, John Colletti 1,
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  FOX    First Business    News/Business. Insight on the  
   economy and stock market. (CC)  

    July 21, 2010
    4:30 - 5:00am EDT  

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you're watching first business: financial news, analysis and today's investment ideas. good morning everyone and thanks for joining us. we've got lots to cover in today's show. including bp and how it's still dealing with the fallout of the oil spill which began back in april. we're going to look at how it's affecting bp gas station owners, as well as travel to the gulf coast angie. well good morning to you beejal. and as you know of first business we like to bring you the stories you won't see just anywhere. so today we're tapping into trader insights. into how do they know when to get into the market and when to get out. there's definitely a time to stick to the side lines, beejal as you know. in recent months angie, it's definitely been a volatile market. plus that phrase 'made in america'. well that means something really different we're talking about american cars. we'll explain coming up later.
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it's a year of manic trading. professional traders i spoke with tell me they have never experienced wilder markets than what's been happening during the past few months. and with every volatile day comes the question traders ask themselves: is it a time to get in or out of the market? more than ever, traders are on guard for the next dramatic market move that could bring them profits or put them out of business. "with the wide dramatic moves that have happened, huge swing in volatility, sometimes th best trade is one that you don't make." ron dawczak of g-bar trading has been making a living on the floor of the chicago board options exchange for the past 13 years. he credits his success in part to good mentoring. just "how" he knows when to go heavy with a trade or lighten up is hard to pinpoint. "it really is, it's a feel and discipline." his advice to non-professional traders and investors... "i would tend to say it might be best for the non professionals to hang back and wait, till the markets do settle
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down." dawzsak works side by side with veteran trader john colletti. colletti has been on the floor since the 80's and has survived market meltdowns. including the rapid fire sell off may 6 when the dow plunged nearly 1000 points. "if the markets get ridiculous, we are allowed to turn the computers off and get out of the market. reporter: have you had to do that recently? i actually had to do it for part of the day when we were having the quote unquote flash crash." "it's a reality that the markets go through high volatiltiy and low volatiilty." as an author and educator at the cboe options institute, jim bittman instructs non professional traders to learn the historic runs of stocks and what to do when it's beyond the norm. "market conditions change and big gyrations happen. that's
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what stop loss orders are for. and maybe you should stay out of the market until you get a better feeling for what's happening." independent trader larry zelikoff has a trading partnership with his brother. he's moved off the trading floor, but continues to own at seat at cboe. in his view, being a successful trader boils down to having a healthy fear of the market. "i've known lots of traders who have made lots of money, bought expensive things. but markets move very quickly. you can be in and out of business very quickly, and its lost cars and houses. it's very tough." even tougher, knowing how to get into the market when every one else wants out. traders tend to watch the volatility index, also known as the vix for signals about the market. lately when the number is above 30, it means volatility is ahead. when it's under 25, the markets are likely to be less volatile. meanwhile, the level of anger against bp continues to escalate in light of how the company has managed the oil spill. we visited several bp gas stations to see how they've been dealing with the fall out. driving past a bp gas station? you really can't tell that thousands of americans are boycotting this company because of the oil spill. bp gas stations are packed with customers filling up on gas. tony haddad, owner of this bp franchise says he's aware of the potential backlash. "it will hurt small businesses.
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of course we're going to get hurt. any business if people stop buying is going to hurt them right?" but he says sales at his gas station are still going strong, despite the negative publicity hitting bp. "so far, thank god we are working in the right direction. let's put it that way." tony haddad may seem confident about his business, but he did not want us talking to his customers about the oil spill. so we came to this bp gas station a few miles away and it's the same story. the owner's policy: "no media allowed". on the third try, we finally found a bp gas station were we could talk to customers. "i don't think the owner of this business, who's probably struggling, should be penalized." "i don't feel we would be penalizing bp. we would be hurting the small business owner." and others say despite the massive oil spill constantly in the news, they don't think about it when it's time to fill up the tank. "i didn't think about it when i drove up. how does it make you feel?
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now that you're interviewing me, i dont' feel quite as good about it." "are you going to continue filling up at bp stations? that's tough. i feel like i might try to skip past it, but i know the owner here. he's a nice guy and i've been coming here for years. it's a convenient location, so i will continue to come here." and even though a station does not have the bp logo, it doesn't mean they don't buy gasoline from the company. "i think one thing people need to understand is that half the gas stations in chicago, bp produced. but majority of stations in city have gas from bp." bp does not own any gas stations. they are all owned by independent operators who buy the gasoline from bp. the franchisees also pay royalties to bp for using the company's logo. how the oil spill is impacting people's summer travel plans. and what's the best way to make sure your vacation won't be spoiled?
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tourism is a multi billion dollar industry in states along the gulf of mexico. now, those economies are facing a very tough summer from the effects of the oil spill. we spoke with travel expert laura powell for more on how the disaster is impacting summer travel to the gulf laura, we see images of oil washing ashore in the gulf coast. so to what extent are people canceling their summer trips to that area? well unfortunately areas down there are looking at millions. and in the case of florida, even billions of dollars lost down
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there potentially. it is a mess. some destinations may end up benefiting from it. some of the beach resorts along the eastern seaboard may get more business than usual this summer. but for sure, it is really impacting the gulf states in a bad way. and tourism is a really important industry. in louisiana and mississippi it is very important. because of the oil prices, are there better airfare or a hotel prices in the gulf coast? i think you will definitely find good hotel deals. they're going to be quite desperate for business. in the louisiana area, they have a lot of emergency workers in those hotels. along the florida coast you can find good deals. i think hotels in general this summer will be able to give you good deals. the hotel industry
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is still a little behind and they're still a little in their recession. if you go on line and look for hotel packages they are a lot of value deals out there. one place, doubletree dot com is a good place to go. a number of the hotels are offering good deals. no matter where you go in the country. for those of you who do want to travel, not all the beaches are off limits right? that's true. you want to check the state websites before you go. you also want to look for volunteer opportunities. if you want to take a vacation and volunteer, and help out the tourism industry that may be a way to go as well. do you think that airlines and even hotels are being more flexible with their cancellation policies? i'm not quite sure about the airlines because the airlines are the
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last to be flexible. the hotels, however are being flexible from what i understand. i think they'll be more than welcoming if you show willingness to come down there. you may get a few extra nights free, or special things. ok, so the best thing for visitors to the gulf coast would be to check state websites or tourism websites? absolutely the state of florida, or local areas like pensacola or alabama. you can go to all their websites. go to the specific area you are interested in going to. thank you so much for your advice. we appreciate it as always. travel expert laura powell. american cars are winning the race in quality against their foreign competitors. can it drive up sales? that's next.
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since the '80's, jd power and associates has been asking new car owners to report problems in the initial 90 days of ownership. and for the first time, the 2010 study shows by a narrow margin cars made in the u.s.a. outpaced imports in terms of quality. but have the
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car companys' images improved? us automakers finally listened. consumers seem to be shifting their views about buying american. "cadillacs are awesome. i mean my next car is a cadillac. reporter: and you are driving what right now? a lexus. this is a great car for as long as i have had it don't get me wrong, but cadillac is putting out a great car right now. and, yeah, i will go back to buying american." "we now have people thinking i want to buy american." david koehler, marketing professor at the university of illinois at chicago believes american automakers are doing a better job of keying in on what consumers want. "i think that as for becoming more fuel efficient, environmentally friendly, it's becoming better." "would you buy an american car?
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do you think the quality is getting better? i do, i do feel like the quality is getting better. especially now that taxpayers bailed them out. they were forced to." koehler agrees bailout money sparked u.s. automakers to improve quality. ford did not take the money and successfully ranked number 5 in overall quality. behind porsche, acura, mercedes-benz and lexus. industry experts credit ford ceo alan mulally with cost cutting, restructuring the company and winning over customers. "we have operations all around the world. our fundamental plan is to grow the businesses in every country that we operate and then use our global assets to get the value of our size, where we operate locally, but we use all of our knowledge worldwide." koehler points to other reasons why u.s. carmakers are on the road to recovery. "they have streamlined production. quality has improved. they have adapted with styles that are out the.the of what people want. and, so happened that toyota had a terrible year." toyota and its dented image fell to 21st place in the 2010 jd power ranking from 6th in 2009 as american cars motored forward. "it's a great shift. it will increase demand, but these rankings translate into sales overtime." the a vice president of j-d power and associates says while american car makers finally won in the quality category, there
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is still a ways to go in image. meanwhile when it cos to cars, just because you drive a chevy or a ford, doesn't mean 100-percent of your car actually comes from the u-s. just like parts of a toyota or bmw may have been put together in kentucky or south carolina. so what does made in america mean when it comes to cars? paul eggers spoke with patrick olsen of cars.com for some answers. patrick, always great to have you on the show. now cars dot com american made index rates of vehicles built and bought in the u.s. based on their homemade content. how do these rankings actually work? so what we do is look at the domestic parts content of cars. and to get to on this list, the car has to have at least 75% of its parts labeled domestic. second, we look at the final assembly point, which has to be in the u.s.. and the third, we weigh the sales in the u.s.. with the presumption being that the better a car sales, the more suppliers, the more autoworkers than are employed building that car. now, taking a look at the numbers. there is five cars on your list in the top ten.
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actually from japanese automakers and five from the detroit big three. is this surprising to you? well we've seen this trend sort of over the years. this is the fifth year that we have done this list. we are definitely seen some trends. and we've definitely seen a trend of a few more of foreign auto makers coming on the list and some of the american ones coming off. but in some ways is good for detroit automakers. for example, for it. they're building cars that are on a global platform and not just for the u.s.. when they would build three different platforms, it was a very expensive and inefficient. building one global car is much more efficient and therefore they have better margins on those cars. well, speaking about the japanese auto makers, what advantages do they have to assembling the cars and making cars more american mate? what they have done, hyundai, honda, toyota have recently opened plants in the u.s.. and their goal is to build the cars where they sell the cars. the north american market is huge for them. so it allows them to build
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the cars here, and save on the transportation cost. and also build good will with their future consumers. is it working? it seems to be. toyota camry, 97 percent of the camry's sold today are built here in the u.s.. honda has done very well with the accord. hyundai, i know the building the snot out of the new plant in the south. so it certainly seems to be resonating with shoppers. now the j.d. power and associates' recent rankings that show american carmakers increasing equality. does that have anything to do with those cars being made in the u.s. were being made elsewhere? i think it has less to do that than the domestic 3 really buckling down on the reliabilitynd quality. that was a big thing against them for a very long time. i was said that get into a lot of cars every month. the domestics are doing a better job of building much a better car. now they still have some ground to gain up, an american domestic average versus foreign average. the average of them by a point in the j.d. power and associates survey. but they have a long way to go to sort of woke up at
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quality reputation. are the american car makers doing a good job of letting consumers know that they're actually producing cars with a better quality? i think they're certainly trying. i think they realize that is the message they need to sell. it get just the power d speed and flash. that reliability is safety. i think a lot of the domestic 3 look at toyota's troubles and recalls and say this is an opportunity for us to get a message that we are safe or safer than our foreign competitors. well you can head to cars dot com to check out how much of your car was made in america. patrick olson is the editor of cars dot com. thank you very much for your time. thanks paul. and coming up next... how to re-invent yourself in an age where we're all facing multiple career changes.
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facing the prospects of multiple career changes in the new economy. earlier we spoke with michael woodward, author of 'the you plan'. he says you should stop chasing jobs and start creating your own opportunities. swhat prompted me to start writing 'the you plan' is i sat down and realize that we have got a lot of people out there who are basically doing task level stuff. and what happens is when you lose your job after 20-30 years. or even coming out
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of the bubble of the college campus life, it can b psychologically paralyzing. and what that does is force you to start thinking of things like rewriting my resume or shotgun blasting all across the internet for job boards and things like that. and what happens is people put the cart before the horse. you say it's psychologically paralyzing because people lose their identity after they lose their jobs. after decades on the job. then how should we be looking at forming a new identity? beejal, think of it this way. when you lose your job, you lose your daily routine. your rituals, the daily commute that you take to work. the socialization that you he. it is basically your identity. so that's tough for people. so what i'd tell them to do is use the time wisely. especially those who have been out work for longer than six months. step back and start looking introspective. my training is in psychology, so i tend to look at things a little more
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introspectively. that is the key to getting a good start. you have to know yourself before you effectely be competitive withd the millions of people looking for the same job. ok, and you have to figure out what you're yourself. but also to create a personal brand. how do you create that brand? because that seems to be very difficult. most people have a hard time thinking of themselves as a brand. it's really tough. and at times, it feels shameless. what i tell people to do is first of all step back and get to know yourself. what are your values, because that is what drives your decisions. what are your intrinsics? the things you bring to the table, like your personality, affiliation to relationships. and what are your passions? what excites you and gets you out of bed in the morning? if you can answer those questions, you essentially answered what you are about. that is your foundation or your essence. and that's a wonderful thing to know what you are about. and you can be the greatest person in the world, or the greatest prospect. but, if nobody knows about it, it
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doesn't matter. that is where you have to take yourself in yourself out there. and thatput involves creating talking points. you also talk about finding the people are doing what you want to do. what should you be doing? this is something that is commonly missed. i tell people to go find the people that have the jobs or career that you want. hang out with them. emerse yourselves in their role. find a way get in, because let's face it. most of the job market is really connections and one to one face time. it's not gonna be sending in resume's, it's not going to be getting that interview. its not gonna be social meeting, necessarily. depending on the level of connections you make. so i say go to the happy hours. go to the professional association meetings. go to the on-line chat rooms. find these people and get involved with them. volunteer, or do internships. find ways to get in that door. all right, lots of great advice that we can all use. thank you very much, doctor woody. his full name michael woodward, author of 'the you
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plan'. thanks for joining us for today show. have a great day. we'll see you next time.
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